Issue Position: Health Care

Issue Position

America is facing an unprecedented challenge to its health care delivery system. At a time when the first wave of baby boomers are heading toward retirement, the demographic reality is that we will face a greater demand for health-related services, accompanied by a reduction in the number of working people paying into an increasingly tax-funded health care system.

With over half of all Americans receiving some type of federally subsidized medical care, there are some calling for a complete federalization of our health care system as the next logical step to improved care and expanded services for all Americans. They would look to Europe as a shining example of a workable universal health care system. I, too, would look to Europe, but for a very different reason - in order to avoid some of the well-known pitfalls encountered by our friends across the Atlantic.

In Britain, for example, many cancer patients have had to wait months or even years for treatment that is routinely available in the U.S. In addition, single payer systems like those in the UK, Sweden, and elsewhere are especially vulnerable to the demographic shift with respect to aging. As a consequence, many European nations are now encouraging increased privatization of health care services. Britain's National Health Services (NHS) has contracted with American firms to deliver IT, procurement, and other services to British patients.

Ironically, it is now Europe that is looking across the Atlantic for solutions to its looming health care crisis. Europeans are seeking creative, American approaches to alleviate potentially life-threatening problems such as long wait times, restricted availability of innovative and effective treatments, and limited access to physicians. Sweden is taking steps toward expanding private sector options after finding that the primary health care centers and hospitals which have been privatized are much more productive than the public health care centers. In July 2006, the Italian government passed reforms that will allow supermarkets to start selling nonprescription drugs. Consumer savings from this market measure is estimated to be around 15-20% of the price of the drug.

There are those who argue that a nationalized health care delivery system would be less expensive than private insurance coverage, particularly with respect to prescription drug benefits. Comparing health care systems solely on the basis of per capita spending is deceptive. First, our funding of pharmaceutical research and development has led to state of the art treatments sought after by Americans as well as Canadians and Europeans. Second, it is impossible to measure the cost of potential increases in long-term hospital care and patient morbidity under a system lacking in incentives to develop effective, life-saving treatment.

In Canada, for example, the per capita investment in research and development is less than half that of the U.S. and one of the lowest in the developed world. The effect of government regulation of drug pricing is that Canada now generates pharmaceutical products at half the rate of the U.S.

As a nation that prides itself on freedom of choice and diversity, we are not ideologically suited to a centralized health care system that offers neither to its patients. A federalized health care system is unavoidably a political system under which lawmakers are given ultimate decision-making power concerning the broad scope of health care needs of private citizens. When the delivery of health care services is removed entirely from the mechanism of the market, the inevitable result is the rationing of services. Health care policy would be directly subject to a shifting political climate, with potentially deadly consequences.

Health care in America is far from perfect. Our own aging population and the resulting burden on Medicare and other subsidized services requires a comprehensive, long-term solution. The prohibitive cost of some health insurance policies means many Americans are left without coverage. There are, however, reforms that can serve Americans well, such as health care savings accounts, individual health care tax credits, small business health plans, and the creation of a single health care market with diverse coverage options. Some of these reforms have already been initiated and implemented.

Last year, the House passed the Small Business Fairness Act of 2005, which would establish Association Health Plans (AHPs) - group health plans whose sponsors are trade, industry, professional, or similar business associations. This would allow small businesses to pool together to negotiate lower health insurance rates, giving millions of small business owners, their employees and families access to affordable, quality health care.

The Health Savings Accounts Premium Affordability Act of 2006, introduced last summer, builds on the success of the popular health savings accounts (HSAs) that became law under the Medicare Modernization Act of 2003. Under this bill, families who buy health insurance on the individual market can make tax-free contributions to their HSA for out-of-pocket medical expenses, including health insurance deductibles and co-payments. This will enable those who are otherwise unable to afford health insurance to obtain coverage for their families.

Instead of adopting the failing European model, members of Congress must continue to work together to develop a comprehensive consumer-driven health care delivery system that would allow more Americans access to coverage without sacrificing the superior care and groundbreaking research that have been fundamental to quality health care in our nation.

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